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Almost all Americans now own a mobile phone, and four-fifths of their phones are smartphones. In 2013, only half the country owned a smartphone. As the market for smartphones and the services they enable continues to grow, telecommunications companies compete for customers by offering enticing deals. This leads to an increase in consumer welfare—lower prices for better products.
Competition among telecommunication companies offering better and better deals has surged in recent years. In 2017 alone, the average price of wireless telephone services—mobile phone contracts, prepaid plans, and Internet services—decreased by 12 percent. This is a dramatic decrease in prices. For perspective, prices for these services decreased a total of 12 percent over the preceding five years, from 2013 to 2017.